Macro Links Feb 23rd – Smart Money Went Back to Selling
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
- BLOCKCHAIN, FINTECH, DIGITAL PAYMENTS
- FOREX, CARRY TRADES, EXCHANGE RATES
- TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
- BUDGET, INFRASTRUCTURE, HEALTHCARE, IMMIGRATION
- GUN CONTROL, MARIJUANA BOOM, PUBLIC POLICY
- TAXATION, WEALTH HAVENS, INEQUALITY
- RUSSIA MEDDLING, RUSSIA PROBE
- NORTH / SOUTH KOREA, IRAN, NUCLEAR WEAPONS
- INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
- VOLATILITY, BLACK SWANS, LIQUIDITY, TAIL RISKS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- CENTRAL BANKS & MONETARY POLICY
- USA ECONOMY DATA, CITIES AND STATES
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- REAL ESTATE, HOUSING, REITS, COMMERCIAL
- HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
- ENERGY CRUDE OIL, OIL SANDS, SHALE
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- GEOPOLITICS, CRIME, TERRORISM
- PROPAGANDA, CORRUPTION, AUTHORITARIANISM
- ELECTORAL POLITICS
- SILICON VALLEY, UNICORNS, STARTUPS, VC
- RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
- AUTOS, ELECTRIC, SELF-DRIVING
- AEROSPACE, MILITARY & DEFENSE
- SCIENCE, NATURE, PSYCHOLOGY
BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
More than 4 million people have signed up to open accounts at Robinhood Markets Inc. as the brokerage app begins offering commission-free trading of Bitcoin and Ethereum today for the first time. Robinhood had signed up 2 million users as of April, a figure it saw jump to 3 million in November and skyrocket since saying it would offer crypto trading.
Venezuela forbids its citizens from buying foreign currency. The restrictions mean that not accepting bolivars in the Petro pre-sale effectively shuts out residents in the country. The sale is a last-ditch attempt to raise funds since sanctions stemming from Venezuela’s debt default hamper the nation’s ability to issue traditional securities.
After the launch of the Venezuelan government-backed cryptocurrency the Petro on Feb. 20, President Nicolas Maduro has already hinted at second government cryptocurrency soon to be released, according to government-sponsored news outlet TelSsur. This time, the government-backed cryptocurrency will be backed not by oil, but by gold.
Venezuelan Finance Minister Simon Zerpa Delgado was in Moscow on Wednesday discussing collaboration between the two governments, according to tweets published through his official account. According to one missive, the subject of the petro – which was unveiled in December and sparked global headlines with its launch Tuesday – was brought up during the meetings.
Information and Communications Technology Minister MJ Azari Jahromi made the announcement on Twitter Wednesday. He described a meeting during which “digital currencies based on the [blockchain]” were discussed, adding that it was decided “to implement the country’s first cloud-based digital currency using the capacity of the country’s elite.”
This week, investors got an email explaining that Telegram is doing another private presale, four sources with knowledge of the deal told The Verge. The exact amount to be raised is still being determined, according to one source, but two other sources said Telegram is estimating it will be around the same size as the first round, which would bring the total raised to around $1.6 billion before the ICO even opens up to the general public.
“There is a bit of a, I would say, speculative mania around cryptocurrencies in terms of their valuations, which I view as pretty dangerous because I don’t really see what the actual true underlying value of some of these cryptocurrencies actually is in practice,” Mr. Dudley said.
France’s top markets regulator is getting tough on cryptocurrency trading. The Autorite des Marches Financiers said on Thursday that online trading platforms for cryptocurrency derivatives fall under the European Union’s MiFID II regulations and face tough new reporting and business conduct standards. The platforms should also be barred from advertising the products electronically, a common practice in the industry.
Bitcoin and many of its peers have crashed in recent months from all-time highs reached in December. But that hasn’t dented the popularity of one crypto-fundraising method: so-called initial coin offerings. Sales of those digital tokens have already raised about $1.66 billion this year, according to research and data firm Token Report.
It’s truly the Wild West when it comes to initial coin offerings for cryptocurrencies. No country has drafted specific legislation governing the popular method startups are using to raise funds, according to a survey of law firms across 18 global jurisdictions posted on Lex Mundi’s website. The tool to compare regulations on ICOs shows countries from the U.S. to South Korea to Switzerland instead rely on a hodgepodge of laws meant for securities, commodities and currencies.
The Tezos foundation raised funds to develop a new cryptocurrency in July, through a so-called initial coin offering. While the Tezos ICO remains one of the largest by amount raised, contributors have yet to receive the new cryptocurrency because the project was derailed by infighting between the project’s founders.
U.K. lawmakers are launching an inquiry into cryptocurrencies to investigate their benefits and risks and consider how the new technology should be regulated. Parliament’s Treasury Committee will examine the impact of Bitcoin and its peers on banks and consumers and consider whether they could ultimately replace traditional money, it said in a statement on Thursday.
Most digital coins have trailed Bitcoin since early January, but there’s one outlier, according to Fundstrat Global Advisors: tokens that are set to split in two, or fork, and cryptos planning airdrops, or free token distributions. This group has outperformed the top cryptocurrency by 5 percent since the start of the year, when alt-coin prices peaked.
A plan to launch a new cryptocurrency by forking the litecoin blockchain went off without a technical hitch over the weekend, but at press time, the market isn’t exactly embracing the new coin. Currently trading at just $5 on a little over $1 million in volume, litecoin cash (LCC) is valued at just 2 percent of the price of the official litecoin project, the world’s fifth-largest cryptocurrency and one of the few to see nearly $1 billion in volume Thursday.
Energy markets data provider S&P Global Platts has announced the commercial deployment of a blockchain platform for sharing oil inventories in the United Arab Emirates (UAE). Marking one of the first real-world products utilizing blockchain tech in the oil industry, Platts’ network to allow market participants to submit data on oil storage on a weekly basis to the UAE’s Fujairah Oil Industry Zone (FOIZ), as well as the overseeing body FEDCom.
BLOCKCHAIN, FINTECH, DIGITAL PAYMENTS
The mass migration to digital hongbao — initiated four years ago by Tencent — highlights the explosion of making payments with the swipe of a phone in China, where even beggars accept alms by proffering a QR code to passers-by. China’s third-party mobile payment market was worth an estimated $15.5tn last year, dwarfing those in the US and other countries.
FOREX, CARRY TRADES, EXCHANGE RATES
FX markets tend to exist in a series of distinct phases — sometimes lasting several years — where the default explanation for the way in which the various currency pairs move tends to focus on the behaviour of a single economic indicator. Recent changes in US fiscal policy may now have shifted the indicator from monetary base differential to the current account imbalances between the countries on either side of the currency pair. If this proves true, a bit of back-of-the-envelope maths around Japan’s status as the world’s largest net creditor nation suggests that the yen faces unrelenting upward pressure for years to come.
One of Australia’s biggest money managers is wagering the nation’s currency will slide, just as hedge funds ratchet up bets on the Aussie appreciating. The Australian dollar will drop to 73 U.S. cents before the end of the year, according to Ilan Dekell, head of macro for global fixed income at AMP Capital Investors Ltd. That’s at odds with leveraged accounts — often hedge funds — that this year have increased positions that pay off if the Aussie strengthens.
Eurozone concerns over the weakness of the dollar were laid bare in a set of European Central Bank minutes that highlighted fears the Trump administration was deliberately trying to engage in currency wars. The account of the ECB’s January monetary policy meeting also reveals that its hawkish members pushed for a change in the bank’s communications, arguing economic conditions were now strong enough to drop a commitment to boost the quantitative easing programme in the event of a slowdown.
TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
Mexican buyers imported ten times more corn from Brazil last year amid concern that NAFTA renegotiations could disrupt their U.S. supplies, according to government data and top grains merchants. Mexico is on track to buy more Brazilian corn in 2018, which would hurt a U.S. agricultural sector already struggling with low grains prices and the rising competitive threat from South America.
BUDGET, INFRASTRUCTURE, HEALTHCARE, IMMIGRATION
The lack of clarity about when and how Viktor and Amalija Knavs obtained their legal residencies raises questions about whether the couple secured their residency through family-based immigration, which President Trump calls chain migration and has said he wants to restrict. Immigration experts said it would have been the most direct, and most likely, way for Mrs. Trump’s parents, formerly of Slovenia, to get their green cards.
GUN CONTROL, MARIJUANA BOOM, PUBLIC POLICY
Organizers of a rally against mass shootings planned for next month in Washington are expecting up to 500,000 attendees, according to an event permit application. The event will include “student speakers, musical performers, guest speakers and video tributes,” according to the permit application, with 14 Jumbotrons and 2,000 chairs.
The head of the National Rifle Association, Wayne LaPierre, leveled a searing indictment on Thursday against liberal Democrats, the news media and political opportunists he said were joined together in a socialist plot to “eradicate all individual freedoms.”
It was unclear whether Trump was aware that the Motion Picture Association of America already rates films based on graphic sexual or violent content; or if he was suggesting that ratings system needs to be overhauled.
Mr. Trump, who is under intense pressure to embrace stiffer gun restrictions in the wake of the Parkland tragedy, appears to have seized instead upon the idea of giving educators weapons, a proposal backed by the National Rifle Association, which has pressed to expand the right to carry a concealed firearm nationwide.
BlackRock Inc said it will speak with weapons manufacturers and distributors “to understand their response” to the second-deadliest shooting at a public school in U.S. history, putting pressure on companies such as Sturm Ruger & Company Inc and American Outdoor Brands Corp. BlackRock is the largest shareholder in both gunmakers and has more than $6 trillion in assets under management. It stopped short of saying it would divest its funds of gun companies, however.
The Florida Education Association is urging the state body that manages pension funds for its members to sell its holdings in companies that make a semi-automatic rifle used in a recent school massacre.
Obama’s show of support came shortly before Wayne LaPierre, the National Rifle Association’s Executive Vice President, told the Conservative Political Action Conference Thursday that politicians and the media are exploiting the Florida school shooting to expand gun control and ultimately abolish the second amendment.
Senator Rubio and a spokeswoman for the N.R.A. were repeatedly heckled at a nationally televised forum after they refused to back new measures. Mr. Rubio, Republican of Florida, also drew the ire of the crowd for refusing to support a ban on assault weapons and for saying that he intended to continue accepting money from the N.R.A. and other groups that support his pro-gun agenda.
Teachers are slamming President Donald Trump’s plan to bring more guns into schools by arming 20 percent of educators. “We need solutions that will keep guns out of the hands of those who want to use them to massacre innocent children and educators,” Lily Eskelsen García, president of the National Education Association, told Education Week. “Arming teachers does nothing to prevent that.”
“The idea of having a gun in my classroom or any of my coworkers’ classrooms makes me sick. It’s incredibly irresponsible and frankly it’s insane. In 2017 there were over 2,000 accidental shootings. I can only imagine what that number would be if guns were allowed in schools. Like I said, I can’t believe we’re even having this conversation in 2018.”
TAXATION, WEALTH HAVENS, INEQUALITY
As business owners pore through the new tax law, many are asking themselves a fundamental question: Will changing how their company is structured cut their tax bills? “This is one of the most pressing issues for taxpayers and business owners,” said Mark Everson, vice chairman of tax-consulting firm Alliantgroup LP. “They are looking carefully now at how they are legally organized.”
Buyback announcements are up 22% this year to $67 billion in just six weeks, Goldman said in a note to clients. This follows a report by benefits consulting firm Aon Hewitt finding that 83% of large companies don’t expect the tax cut to boost salaries at all — just help pay for small bonuses companies like WalMart and AT&T T gave workers, which reporters soon discovered were, themselves, skewed toward higher-paid, longer-tenured employees in many cases. And it comes as Goldman finds companies have raised guidance on re-investment in their businesses — the putative reason for cutting corporate taxes at all — only 3%.
Ireland expects the final disputed tax bill that the European Commission ordered it to collect from Apple (AAPL) to be “in the ballpark” of the 13 billion euros ($16 billion) estimated, the head of the country’s tax collectors said on Thursday.
RUSSIA MEDDLING, RUSSIA PROBE
While critics accept the need for due diligence, some say the administration has not helped its own case. Treasury submitted two lists to Congress in late January. While the classified version is understood to contain more detailed information about possible targets, the administration was mocked over the public version, which some said had been copied and pasted from the Forbes rich list for Russia.
Former Trump campaign chairman Paul Manafort and his former deputy, Rick Gates, were indicted on new tax and bank fraud changes as U.S. Special Counsel Robert Mueller mounted a fresh legal attack to strengthen his case against the men.
Former Trump campaign official Rick Gates has fired his lawyer, The Daily Beast has learned. And, contrary to recent media reports, Gates is not about to make a deal with the Special Counsel Robert Mueller, according to sources familiar with the matter.
“With regard to Manafort, look, this is all about having Manafort flip on Trump,” Figliuzzi continued. “It’s all about showing the Russia connection. Manafort has that kind of information available. He’s not flipped yet. He’s not cooperating. And I’ll tell you what, if he doesn’t do it with these new tax charges, you’re looking at Manafort literally dying in federal prison based on the tax charges are horrific in terms of the gravity of it, the time you’ll spend in prison.”
NORTH / SOUTH KOREA, IRAN, NUCLEAR WEAPONS
North Korea will send a hardline military figure to the closing ceremony of the Winter Olympic Games in a move likely to rile many South Koreans and test Seoul’s flexibility with Pyongyang. The choice of the combative four-star general adds a new twist to the delicate diplomacy of the Olympics, which has been characterised by tough talk from Washington but signs of deepening reconciliation between Seoul and Pyongyang.
INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
Developed nations face a rising tide of government debt that poses “a significant challenge” to budgets as interest rates increase around the world, the OECD has warned. Low interest rates have helped sustain high levels of government debt and persistent budget deficits since the financial crisis, according to the OECD, but the “relatively favourable” sovereign funding environment “may not be a permanent feature of financial markets”.
US utilities, sustained for years in a warm bath of favourable financial conditions, are facing a cold shower. An expected rise in interest rates and the shake-up of the tax system passed into law at the end of last year are threatening to squeeze utilities’ finances. Already, the S&P 500 utility sector index has dropped 13 per cent from its peak in November.
Although there could be any number of causes for the downturn, recent data on an uptick in inflation and rising interest rates are two of the stories that have gained ground. Both can play a role in shaping market expectations, but one, inflation, has a stronger relationship with poor market outcomes.
“The bond market is telling the Fed we see rising inflation pressures and if you are going to be gradual and crawl into three more rate hikes this year we are not going to wait around,” said Peter Boockvar, chief investment officer of Bleakley Financial Group. “The long end of the yield curve is tightening for the Fed.”
Japanese companies are selling super-long bonds amid expectations that Haruhiko Kuroda’s reappointment as central bank governor will prolong easy monetary policy, even as increases in overseas yields put pressure on Japanese market rates to rise. “Even if the BOJ is expected to make no change in its policy, financing managers may feel they should lock in funds for the long-term,’’ said Hidetoshi Ohashi, chief credit strategist at Mizuho Securities in Tokyo.
As a result of the FOMC minutes, the futures-based probability of four or more US rate hikes in 2018 climbed above 30% for the first time. The US PMI indices tracking activity in services and manufacturing came ahead of expectations.
VOLATILITY, BLACK SWANS, LIQUIDITY, TAIL RISKS
Hedge fund clients at Bank of America Corp., who dumped stocks at a record pace in late January before diving back in as markets headed toward their Feb. 8 bottom, were back in selling mode during last week’s rebound. As hedge funds resumed backing away, other clients stepped in, with the biggest source of demand coming from companies themselves. The data is more evidence that caution prevails among professional investors.
“I think we are in a pre-bubble stage that could go into a bubble stage,” the hedge-fund manager said during a Harvard Kennedy School’s Institute of Politics on Wednesday, according to a Reuters report. Dalio, whose hedge fund manages some $160 billion, making it the world’s largest fund, pegged the probability of a recession at 70%.
China’s stock market wasn’t in great shape even before the past month’s slide. In the 12 months through Jan. 24, when the Shanghai index peaked, only a third of onshore Chinese stocks rose. Excluding those that listed in 2017 and this year, four out of five dropped. The lack of breadth meant that when sentiment turned, the market’s source of upward momentum disappeared as everyone rushed to exit the same stocks at once. After climbing 13 percent over the preceding year, the Shanghai Composite Index plunged 12 percent in a little over two weeks.
China stopped updating its homegrown version of the VIX Index, a move that could further discourage speculation in equity-linked options after authorities tightened trading restrictions last week. Like its U.S. counterpart, the SSE 50 volatility index is a widely-followed options indicator that’s viewed by some observers as a gauge of investor anxiety. The index nearly doubled in the span of a few days earlier this month, tracking a similar move in the VIX, as equities tumbled in Shanghai and around the world.
Computer-powered hedge funds shouldered much of the blame for exacerbating turmoil in markets this month but some are pointing the finger at a pillar of the financial system: the insurance sector. Market strategists and industry analysts say a post-crisis change to the way US life insurers manage billions of customer dollars invested in variable annuities (VAs), which are popular tax-advantaged retirement accounts, has been a primary source of the instability.
Steve Eisman, famous for his successful bet against subprime mortgages, said a cocktail of leverage, derivatives and risky housing debt helped cause the global financial crisis. “If you had gone and said to executives, ‘The entire paradigm of your career is wrong,’ the response was, ‘Listen kid, I made $50 million last year, what did you make?”’ Eisman, who is now a portfolio manager at Neuberger Berman Group, said at the Oxford Union in England on Thursday. It’s “very hard to tell someone who thinks he’s God he’s wrong.”
Securities regulators are planning to pare back Obama-era requirements that mutual funds tell shareholders about large holdings of hard-to-sell assets, in what would be a significant concession to the industry. The revisions would represent the first time a major securities rule passed during the Obama administration has come under the knife of Trump administration appointees at the commission. The SEC finished the measure toward the end of the Obama presidency, following the meltdown of a $789 million mutual fund with a high concentration of holdings in junk bonds and distressed debt.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
Familiarity lulls the mind. It is thus easy to miss the enormity of what is unfolding. Mr Mueller is playing a game of chess. Every move is made with his opponent’s king in mind. Last Friday, he boosted his defence by nailing Russia’s interference in the 2016 election. Do not take Mr Mueller’s word for it. HR McMaster, Mr Trump’s national security adviser, said Russia’s role was “now incontrovertible”. That makes it far harder for the president to fire Mr Mueller — something he has tried to do more than once. I would bet Mr Trump now sees General McMaster as a sacrificial pawn.
The government has seized cryptocurrency worth billions of dollars in criminal cases. But where does the money go after the feds get it? These digital seizures and sales, unheard-of five years ago, are fast becoming routine. Bitcoin’s enduring popularity among online wrongdoers, and its growing presence in criminal busts, has turned Uncle Sam into a major player in cryptocurrency markets. While exact figures are impossible to pin down, documentary evidence and interviews with current and former defense attorneys and prosecutors suggest that at least $1 billion worth of digital coins, and possibly much more, has spent time in the custody of U.S. law enforcement.
This use of doctored images was a crucial and deceptively simple technique used by Russian propagandists to spread fabricated information during the 2016 election, one that exposes a loophole in tech company defenses. Facebook Inc. and Alphabet Inc.’s Google have traps to detect misinformation, but struggle—then and now—to identify falsehoods posted directly on their platforms, in particular through pictures.
Given that the Army has used video games in the past as training tools, it makes sense to wonder whether there is a link between gun violence and video games. But when you consider the overlap of two variables — interest in video games and incidents of gun violence — around the world, it quickly becomes clear that there is not much of a link at all.
Is there any act of depravity to which the less respectable right-wing media can’t imagine a connection for George Soros? Dinesh D’Souza should be ashamed of himself. David Clarke should be ashamed of himself, and not just for his ridiculous hat. And conservatives should be ashamed of them, too, and for bending the knee to Scott Baio, Ted Nugent, and every other third-rate celebrity who has something nice to say about a Republican from time to time. And we should be ashamed of ourselves if we come to accept this kind of dishonesty in the service of political expediency. If conservative ideas cannot prevail in the marketplace of ideas without lies, they do not deserve to prevail at all.
Hunger is hastening the ruin of Venezuelan’s oil industry as workers grow too weak and hungry for heavy labor. With children dying of malnutrition and adults sifting garbage for table scraps, food has become more important than employment, and thousands are walking off the job. Absenteeism and mass resignations mean few are left to produce the oil that keeps the tattered economy functioning.
The economic rise of China has been accompanied by a waxing of its scientific prowess. In January, the United States National Science Foundation reported that the number of scientific publications from China in 2016 outnumbered those from the US for the first time: 426,000 versus 409,000. Sceptics might say that it’s about quality, not quantity. But the patronising old idea that China, like the rest of east Asia, can imitate but not innovate is certainly false now. In several scientific fields, China is starting to set the pace for others to follow.
As it cruises through the streets, a self-driving car collects more than a terabyte of data a day, enough to fill 1,400 CDs. With that much detailed information coming from the car’s many sensors, however, it is uneconomic to send it through a network like the internet. Instead, companies have to physically move the data from one hard drive to another, a process sometimes called the “sneakernet” because engineers joke that the hard drives move at the pace of their own footwear. The data collection is part of a great race to amass knowledge about the physical world that can be used to train the new generation of cars.
CENTRAL BANKS & MONETARY POLICY
The US economy is by many measures in its rudest health since well before the financial crisis, a top Federal Reserve policymaker said as he reiterated the central bank’s intentions to gradually increase short-term interest rates. Randal Quarles, the Fed’s vice-chairman for financial supervision, told a conference in Tokyo that growth has been showing more momentum since the second quarter of last year, and that unemployment is at its lowest levels since the 1960s apart from a brief period from 1999 to 2000.
The U.S. central bank is carefully raising interest rates against a brightening economic background that has perked up conditions for the nation’s lenders, said Federal Reserve Bank of Atlanta President Raphael Bostic.
USA ECONOMY DATA, CITIES AND STATES
The number of Americans filing for unemployment benefits fell to a near 45-year low last week, pointing to strong job growth in February and solid momentum in the economy. The economy’s brightening prospects were also underscored by other data on Thursday showing a gauge of future economic activity increasing for a fourth straight month in January. Labor market strength should continue to underpin consumer spending, despite a drop in retail sales in January.
Hundreds of cases of advanced black lung disease have been found among miners in Central Appalachia, even as the Trump administration begins to review Obama-era coal dust rules. The severity of the disease among miners at the Virginia clinics “knocked us back on our heels,” said David J. Blackley, an epidemiologist at the National Institute for Occupational Safety and Health, who led the research published in the Journal of the American Medical Association. It was equally troubling, he said, that nearly a quarter of the miners with complicated black lung disease had been on the job fewer than 20 years.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
Shares of the Snapchat parent company sank 6.1 percent on Thursday, wiping out $1.3 billion in market value, on the heels of a tweet on Wednesday from Kylie Jenner, who said she doesn’t open the app anymore. Whether it’s the demands of her newfound motherhood, or the recent app redesign, the testament drew similar replies from her 24.5 million followers. Wall Street analysts too have begun to notice, citing recent user engagement trends noticed since the platform’s redesign.
Evan Spiegel, the billionaire creator of Snapchat, is likely to be crowned the highest-paid US chief executive of 2017, after his total remuneration hit $638m. When the photo-messaging app’s parent company Snap went public last March, Mr Spiegel received a huge one-time stock award, valued at $637m at the end of last year, according to a regulatory filing published on Thursday.
REAL ESTATE, HOUSING, REITS, COMMERCIAL
Dell Technologies founder and CEO Michael Dell was the buyer behind the $100.47 million purchase of a penthouse on Manhattan’s Billionaire’s Row, according to two people familiar with the deal. The transaction, which closed in 2014, holds the record for the most expensive home ever sold in New York City.
HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
Hedge funds which use the US courts to wring higher prices for merger and acquisition deals are fighting to save the lucrative investment strategy, after a Delaware court ruling that threatens to shut it down. Verition Partners, an investor in Aruba Networks, which was acquired by Hewlett-Packard in 2015, has asked a judge to reconsider a ruling last week that not only refused to raise the price of the deal but cut the payout to the hedge fund by 30 per cent.
Griffin, who started Citadel in 1990, has a history of seizing the moment when others are in distress. He’s hired teams or took on assets from hedge funds such as Visium Asset Management and Sowood Capital Management after they imploded, and also made a push into investment banking after the 2008 financial crisis. Almost two decades ago, he started fixed-income arbitrage trading after hedge fund Long-Term Capital Management lost billions on such trades and was bailed out.
Goldman is zeroing on an industry that has secured a record amount of dollars from pensions and endowments in recent years to buy and lend money to businesses. U.S. private-equity firms raised over $362 billion in 2017, the most money in a year since 2007, according to LP Source, a data provider owned by Dow Jones & Co., publisher of The Wall Street Journal.
ENERGY CRUDE OIL, OIL SANDS, SHALE
The fact that the Saudis decided against moving a cargo to the world’s biggest oil consuming region this month doesn’t mean they won’t consider it again. Such a sale would be unprecedented, and a potential strategy by the Middle East nation in the face of rising U.S. production. American supplies are proving a threat to efforts by the OPEC producer and its allies to clear a global glut and prop up prices.
BREXIT, SCOXIT, LONDON, UK ECONOMY
As Theresa May tries to navigate the political minefield of Brexit, the future of the key financial market infrastructure located in London is becoming increasingly urgent. This week, Ireland stepped up contingency planning to ensure shares on the Irish stock exchange can still be traded if the UK leaves the EU abruptly in March 2019, while Deutsche Bank said on Wednesday that it will make Frankfurt — not London — its centre for booking trades unless there is a transition deal that smoothes Britain’s exit.
GEOPOLITICS, CRIME, TERRORISM
Concern about Taiwan’s fate now appears to be building slowly in Washington, even as President Trump continues to seek China’s help on other issues. Through his first year in office, Mr. Trump pressed Beijing to put more pressure on North Korea to abandon its nuclear and ballistic missile programs, with limited success. He has also sought to limit China’s nearly $400 billion trade surplus with the United States, which has nonetheless continued to widen.
A man threw an explosive device onto the grounds of the United States Embassy in Montenegro, doing only minor damage, and then killed himself with another explosive, the Montenegrin police said on Thursday. The attack occurred around midnight local time, while the embassy was closed, and no one was injured.
The pact illustrates the political shift undertaken in recent years by Mr Erdogan as he associates himself with a classic rightwing Turkish nationalism and moves closer to the stance of the MHP. It also underscores how the president has been shaken by disappointing poll results that suggest his popularity is fraying.
PROPAGANDA, CORRUPTION, AUTHORITARIANISM
The president’s son is in India on behalf of the family business, but word that he planned a speech on foreign policy took the controversy to a new level. As Mr. Trump hopped from city to city, Senator Robert Menendez, Democrat of New Jersey, sought assurances from the United States Embassy in Delhi that it was not helping Mr. Trump. And ethics experts seemed unable to overstate the incongruity of a sitting president’s son drumming up business overseas.
The other day, we ran down the seven governorships held by Democrats or independents that could fall to the GOP in November. Today’s list of vulnerable Republican seats is more than twice as long. According to qualitative assessments by nonpartisan handicappers — The Cook Political Report, Sabato’s Crystal Ball and Inside Elections,1 — only eight GOP-held governorships are completely safe in 2018.2 That leaves 18 Republican-held governorships in some degree of danger.
SILICON VALLEY, UNICORNS, STARTUPS, VC
To coincide with its 10th anniversary, the company is launching Airbnb Plus, a brand of accommodations that are guaranteed to meet 100 different criteria and come with certain amenities. More comforts means higher prices: the average nightly rate of an Airbnb Plus home is $200, compared with the $100 average rate per night for a standard listing.
RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
Amazon’s much-heralded convenience store of the future, Amazon Go, may seem like a crazy experiment. But the company plans to open as many as six more of these storefronts this year, multiple people familiar with the company’s plans have told Recode. Some of the new high-tech stores are likely to open in Amazon’s hometown of Seattle, where the first location is based, as well as Los Angeles, these people said. It’s not clear if Amazon will open up Go stores in any other cities this year.
AUTOS, ELECTRIC, SELF-DRIVING
As part of a new program, the Palo Alto, California-based electric-car maker is offering free charging stations to “qualified” employers and commercial property owners. The cost of the actual energy would be the property’s responsibility. A catch: The stations will only charge Tesla models and won’t work on other manufacturers’ electric cars.
Tesla for the first time is notifying some reservation holders new to the electric-car brand that they can begin configuring and ordering their Model 3 sedan. The milestone suggests production of the vehicle at Tesla’s assembly plant is picking up steam after a turbulent beginning in July. Previously, the Silicon Valley auto maker had limited opening orders to reservation holders who were employees or had been previous Tesla customers.
AEROSPACE, MILITARY & DEFENSE
SpaceX successfully launched its 18th consecutive commercial payload into orbit on Thursday, but this time two of the company’s prototype communications satellites went along for the ride. And minutes after blastoff, Space Exploration Technologies Corp., the formal name of billionaire Elon Musk’s company, came close to pulling off another engineering coup: using a specially outfitted boat to “catch” part of the rocket’s returning nose cone.
SCIENCE, NATURE, PSYCHOLOGY
Two millennia ago, a small Greco-Roman temple in present-day Turkey awed and enthralled its residents. Just beyond its stone gate, in a grotto shrouded in a heavy mist, a strange force worked dark deeds: Bulls ushered inside would lie down and perish; the castrated priests in charge would emerge unscathed. Was it the bloodthirsty will of Pluto, the god of the underworld? The supernatural power of the priests? New research published on Feb. 12 in the journal Archaeological and Anthropological Sciences suggests a far earthlier explanation to the cave’s mystery: noxious carbon dioxide.
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